TAT Technologies posts loss on significant impairment charges

TAT Technologies recorded a net loss of $1.5 million in the full year 2012, widened from a $1 million net loss in 2011. Revenues climbed 3% year-over-year to $87.9 million.

The aerospace services company said the net loss is the result of two impairment charges recorded in the second quarter; a $1 million charge in its Electric Motion Systems segment; and a $3.3 million charge stemming from an investment in First Aviation Services.

Excluding the impairment charges, TAT said its 2012 net income was $2.8 million, up 10% from net income (excluding impairment charges of $5.76 million) of $2.6 million in the year-ago period.

Its Heat Management Solutions, Heat Transfer Services and Products and MRO Services for Aviation Components segments all reported year-over-year revenue increases of 3.4%, 0.4% and 11.4%, respectively. It attributed the 14.2% decline in its Electric Motion Systems segment to “growing weakness in the relevant defense markets.”

TAT president and CEO Itsik Maaravi said the full-year results show a continuing trend of improvement, but increasing fuel costs continue to impact the commercial airlines, which in turn affect the company’s business.

“As a result [of increasing fuel costs], airlines are likely to defer MRO activities and utilize existing stock rather than maintaining inventory levels,” Maaravi said. “On the other hand, we continue to witness positive indications from commercial OEMs in the aerospace industry that increase backlog of new airplanes and/or airborne platforms/systems. The defense market, however, continues to show weakness and is impacted by budget constraints in various countries, primarily in the USA.”

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